Fiscal stimulus agreement reached in the US
Congress and The White House have finally reached an agreement regarding a $2 trillion dollar fiscal stimulus to back the economy and American citizens in light of COVID-19`s negative economic effects. The Senate is expected to vote on it on Wednesday, for it then to be passed to the House of Representatives, and lastly, for the President to sign its approval. $500 billion will go to support loans and provide companies and state and municipal governments affected by the contingency with aid, with $50 billion of these resources to go exclusively to airlines in the form of credit. Small businesses will receive up to $350 billion in aid, and hospitals $150 billion (for medical equipment and supplies). Citizens will receive direct deposits from the government according to their income level. Low and medium level income citizens will receive $1,200 dollars per adult ($2,400 per married couple) and $500 per child, with a reduction in the case of individuals whose income exceeds $75k dollars a year. Lastly, unemployment assistance will be extended to 4 months and the range of eligibility is looking to be increased in order to cover more people with $600 dollars a month. Democrats were able to establish controls and limitations on the aid given to corporations: Any company that receives government aid will be prohibited from repurchasing its own shares during the period of credit and one year thereafter; this in addition to limitations on executive bonuses and greater protection to workers. A new Inspector General in the Treasury Department will monitor the loaning program while the Treasury Department will report all terms regarding loans and aid provided to companies, with the law clearly establishing that any business property of the President or any member of Congress is not eligible to receive any loan or aid. At the moment, it seems the Federal Reserve will fund the package with the purchase of debt issued by the government, whose fiscal deficit will increase to levels above 10% of GDP (more than in 2009).